Last Tuesday, the Duke of Westminster, Gerald Cavendish Grosvenor, Britain’s wealthiest native-born citizen, died suddenly on his Lancastrian estate, at the age of 64. Control of the Grosvenor family empire has passed to his 25-year-old son, Hugh, who now becomes the seventh Duke.
Gerald Cavendish was, by all accounts, decent, but tortured. He struggled with the huge responsibilities of his position as the head of the greatest of Britain’s landed estates (leaving to one side the holdings of the country’s royal family).
Certainly, he took life more seriously than his cousin, Hugh, or ‘Bendor,’ the fourth Duke, who kept many racehorses, and mistresses, among them the famous French fashion designer, Coco Chanel.
The owner of seventeen Rolls Royce cars, he has been described as “a pure Victorian, who had eyes for his shotgun, his hunters, his dogs... a man who enjoyed hiding diamonds under the pillow of his mistresses.”
Gerald, who succeeded his father in 1979, has lived in very different times.
He ended his days presiding over an international property empire with £13bn (€11.64bn) in assets under-management, and a family fortune of £9bn.
The Grosvenors may be old money incarnate, but they have had an instinct for survival that is predatory. By the early 1950s, it had become clear that it would be a mistake to put all eggs in the one basket.
The estate made its first overseas investment, in a hotel project in Vancouver, in western Canada. In the 1960s, it expanded into Hawaii and later into the US mainland, before pitching camp in Asia (China is a favoured location, nowadays).
It offloaded Irish assets at the height of the boom, while retaining a large stake in the Liffey Valley shopping centre, which produced an annual rent roll of €30m.
The Westminster Irish connection did not end there. Gerald Grosvenor grew up, with his sisters, on an island in Fermanagh. Both his father, and later his uncle, served as Unionist MPs for the area, up until 1970.
Grosvenor was more at home on farms or on army duty. He served in the Territorial Army, where people did not fawn over him so much because of his rank.
He gifted £50m to a rehabilitation hospital for wounded soldiers, partly in gratitude for the comradeship he discovered while in the military.
At fifteen, following his father’s unexpected accession to the Dukedom, he was told that he would eventually assume heavy responsibilities. This took him a long time to accept.
After his father’s death, in 1979, Grosvenor took charge of an estate that was heavily exposed to an economy that had been unravelling for years.
London appeared in decline, although the Grosvenor estate’s central London properties benefited from the interest of Middle East money men.
The decision was taken to bring in professional management and to diversify by sector, as well as by geography. The group has expanded into fund management and has an industrial division of investments in food and energy.
The Nigel Lawson economic boom of the mid- to late-1980s, and the post-1986 revival of the City of London, prompted a surge in asset prices.
This helped the great estate owners no end, but a new challenge came in 2002, when the Labour government passed legislation allowing people with residential leases to buy it out.
As Ed Hammond, Financial Times property editor, has said, this led to a revolution.
While some ‘passive rent collectors’ shrank in significance, others, including the huge Grosvenor and Cadogan estates, underwent a transformation.
Under the old model, control had been ceded to middlemen, but now the capital that became available under the buyouts was used for further diversification.
Gerald Grosvenor fought a campaign against leasehold reform-based buyouts, while presiding over a business that proved highly adaptive to the changes.
Grosvenor quit the Tory party, annoyed at the lack of support, while fighting a war of resistance in the law courts against commercial tenants seeking similar rights to buy.
This last battle brought success, when the UK Supreme Court ruled in favour of the landed estates in 2013.
By then, however, the Grosvenor estates had become an international business that successfully rode out the 2008 financial crisis.
In 2012, the estates accrued pre-tax profits of £85m, rising to £175m in 2013 (on the back, in part, of asset sales). It has recently invested in an African property fund and aims to take part in what is seen as the last great urbanisation process.
While its executive trustee, Mark Preston, described Grosvenor as the “tortoise of the property world” with a “pace of life .. unusually slow in comparison with its stock market-listed peers”, it has survived 30 downturns in 340 years. The old animal knows its way round some pretty tricky territory.
The Grosvenor story is a reminder of the enduring power of old money in this time of global transformation, and the passing-on of assets by means of primogeniture, to the eldest, or only son.
Yet, few would deny that the estates are well-run, with huge care paid to the maintenance of properties and to the selection of the right combination of tenants, all with the aim of promoting the long-term welfare of whole districts.
Leases are negotiated in blocks with commercial tenants, so that they all fall due at the same time. This means that refurbishment work can be carried out in a planned, rather than haphazard, fashion.
The origins of the Grosvenor estate can be traced back as far as 1677, when a Cavendish ancestor married Mary Davies, then aged fourteen. She brought with her a dowry consisting of five hundred boggy acres in what is modern Belgravia and Mayfair, in London’s salubrious West End.
The Grosvenors have held on to much of the stuccoed property in these districts.
Amid it all stood the sixth duke. As he put it once: “I am only a mere flicker in the process of time.”
He could trace his ancestry to the Norman Conquest. He insisted that his children be educated locally, fretting about the dangers of being self-centred and isolated from reality, as a result of possessing great wealth.
But never for one moment did he consider laying down those privileges, viewing himself as a trustee charged with carrying on the family tradition.
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